Smartphone production declining

Global smartphone production in the first quarter of this year is expected to drop 19% as major handset makers feel the effects of softer demand and weak consumer sentiment in China, according to a technology research report from Credit Suisse.

The weak forecast for the global smartphone market comes after a series of disappointing revenue outlooks from some of the world’s biggest handset makers. Apple and Samsung both posted weak earnings reports in recent months, blaming weaker demand in China where the economy is slowing amid a trade standoff with the US.

Apple’s production expected to slow as well and drop 40% in this first quarter, the same can be expected from Samsung Electronics and other Chinese smartphone makers. Component makers are forecast to see a fall in demand of at least 50% over the same period.

However, Chinese smartphone brands such as Huawei Technologies, Xiaomi Corp and OnePlus have also been gaining share at the expense of Apple and Samsung, with higher specification models and lower prices. Huawei said in December it was on track to ship 200 million smartphone units in 2018 thanks to rapid growth in the past three quarters.

Huawei surpassed Apple in both the second and third quarter of 2018 to become the world’s second-largest smartphone vendor behind Samsung and its smartphone division is now approaching the revenue contribution seen from its core telecoms equipment business.